Crisis Management 101
The way business executives react when a crisis hits can have a game-changing impact on a company's bottom line. Does your business have a clear crisis management plan?
Richard J. Maturi (Oct/Nov 09)
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Creating a Successful Plan
The first step in any successful crisis management program is a thorough review or audit of your operations, including an analysis of the major areas in which your organization is most vulnerable. "We constantly look at everything that can go wrong, because something always goes wrong or different than what you first anticipated," says Harry Kazazian, CEO of Exxel Outdoors, Inc., a leading outdoor recreational gear manufacturer and distributor headquartered in Haleyville, Alabama. He says Exxel uses flexible marketing plans and never over-leverages, a strategy that stood it in good stead when money became tight during the recent financial/banking crisis. As a result, its overseas sales have grown in excess of 200 percent, even as domestic markets fell flat. "We made a conscious decision to manufacture and sell mid-priced goods," he says. "When the luxury market imploded, our sales held their own."
Richard Grenell, senior vice president of corporate communications for DaVita Inc., says crisis management is a key part of the company's strategic planning. "We build it into every system of the corporate communications team and embed it into every facet of the company," he says "Our communication members attend all meetings and participate in conference calls." The Lakewood, Colorado-headquartered company, which provides dialysis services to more than 1,500 facilities and 700 hospitals, employs weekly risk calls where every potential risk is identified, charted, and updated. Grenell says the company also reaches out to media professionals in all markets that cover the company. "The reporters get to know who we are, what we stand for and learn to trust us," he says. "That's key in getting your story out during crisis situations."
St. Paul, Minnesota-based Ecolab Inc. put its crisis management philosophy into practice earlier this year, when the company laid off more than 1,000 employees. "Time is your enemy. We believe in the `one-and-done' concept of personnel reductions in order to reduce the grief and allow the remaining work force to put the cuts behind them," says Douglas M. Baker Jr., the company's president and CEO. "It's terribly hard to do, but it was necessary." Baker's post-layoff strategy included hard work to "jazz up people" and continue to improve corporate culture, which he considers fundamental to the company's success.